The situation arising from the coronavirus is still developing in China. In order to limit the spread of the virus, the PRC State government decided to extend the public holidays of the Chinese New Year, which should have ended on January 30 after a seven-day holiday starting from 24 January 2020 until 2 February 2020. In addition, some local governments declared that businesses irrelevant to the national economy or people’s livelihoods should remain closed for one additional week. All companies must comply with these official requirements. Please see below for details.
Extended public holidays until 2 February 2020
According to the Notice on Extension of 2020 Spring Festival Holidays issued by the Administrative Department of the State Council on 26 January 2020, the public holidays of the Chinese New Year will be extended to 2 February 2020. These additional two days of holidays were decided by the central government at the State level. Therefore, they shall be implemented nationwide. During the holidays, all employees are entitled to enjoy rest and do not need to work while the companies are required to pay full salaries to employees. If any employee must do overtime work, the company must either arrange the employee to take compensatory leave or pay the employee overtime pay later.
At the current stage, companies are well advised not to arrange employees to do overtime work at the office premises or public areas, except if it is extremely necessary, such as for the purposes of virus prevention and control, especially in those locations (please refer below) where local governments have already required companies to remain closed even after the public holidays.
Further period of stoppage of work
In addition to the extended public holidays, until 3 February 2020, around 20 provincial governments, including but not limited to Beijing, Shanghai, Zhejiang Province, Jiangsu Province and Guangdong Province, decided to require companies to continue to remain closed until 9 February 2020. Exempted are those companies which engage in public utility operation such as water supply, gas supply, electronic power supply and telecommunication service, or in businesses relating to virus prevention and control, such as the manufacturer of medical equipment and pharmaceuticals, or in businesses related to daily-life supply such as supermarkets, food producers, etc.
Local governments are entitled to do so according to Article 42 of the Law of the PRC on Prevention and Treatment of Infectious Diseases. Companies are obliged to follow the requirements of their local governments. If a company breaches the law causing any harm or property losses to any person, this company shall bear civil liability according to the law. If a company fails to take preventive measures according to the regulations and causes the occurrence of a serious emergency, in addition to being imposed with a fine of RMB 50,000 to RMB 200,000, the company can also be ordered by the competent authority to suspend business operations or have its business license suspended or revoked. If a company refuses to implement virus control and prevention measures leading to the spread of the coronavirus or a dangerous situation, according to PRC Criminal Law, the company or the persons directly in charge or found responsible can be subject to criminal liabilities.
On 28 January 2020, the Shanghai local government made a detailed explanation about the implementation of relevant policies during the further period of stoppage of work.
1. Companies located in the areas and falling into the scope of stoppage of work as required by the local governments must continuously remain closed until 9 February 2020.
(1) During the period of stoppage of work, companies are obliged to pay full salaries to the employees.
(2) The period of stoppage of work shall be deemed as rest days for employees. The company can ask employees to work from home during this period. However, their work shall be deemed overtime work.
(3) If any company has to start work before 10 February 2020 due to special reasons, the company shall obtain the prior approval from the competent virus control administration authority by submitting an application and supporting documents.
2. Companies located in the areas which were not closed during the public holidays of the Chinese New Year can continue to work during the period of stoppage of work as long as they can continuously work under the current situation without having the employees returning to Shanghai from other places and without causing people moving from one place to the other. However, these companies must still file relevant measures on virus control and prevention with the competent virus control administration authority.
3. Companies located in the areas where the local governments require the stoppage of work but engage in the business of public utility operation, virus prevention and control or daily-life supply can start their businesses right after the public holidays. Specifically, the companies which are in the supply chains of products of virus prevention and control are encouraged to open operations as early as possible and to increase their production capabilities. Logistics companies transporting materials relating to virus prevention and control, or the housekeeping services, supermarkets, which are related to daily-life supply,must open their operations on time.
4. During the period of the stoppage of work, as long as the employees work, no matter whether they work from home or work at the company's premises, the company will either pay overtime or arrange for employees to take compensatory leave afterwards.Different from Shanghai, other locations such as Beijing define the period of stop of work from 3 until 7 February 2020 (excluding the weekends of 8 and 9 February) as working days. Therefore, in Beijing, companies are not strictly prohibited from starting work during such period and can arrange employees to work at different time periods at the company in order to avoid staff gathering. Also during such period, companies in Beijing can arrange employees to work from home by means of telephone, Internet and so on. No overtime payments need to be paid to the employees working during such period.
Please note that companies located in the areas where the local governments do not require stoppage of work can start their operations right after the public holidays, except if they voluntarily decide to temporally close their operations due to the coronavirus.
Since different local governments define the nature of the period of stop of work in different ways, either rest days or working days, therefore, the employees from different locations during such period will enjoy salary benefits differently. For example, if a company asks the employee to work, no matter from home or from the company, the company should pay overtime payments or provide compensatory leave while in Beijing, overtime work benefits do not need to be provided. Therefore, companies may wish to check the applicable local policies when paying salaries to the employees for such period.
Furthermore, companies should not arrange for employees to take annual leave during the period of stoppage of work except if the employees expressly agree especially in Shanghai because these days are already defined as rest days.
All governments including those in the locations where companies are required to remain closed will start work from 3 February 2020. We suggest that except for Beijing, companies needing to start work before the time set by the local government may wish to get the approval from the competent virus control administration authority in advance. Currently, however, it is not clear how easy or difficult it will be for a company to get such approval.
Furthermore, depending on how the virus situation further develops, both the State and local governments may make new decisions or issue new policies. We suggest that all companies pay close attention for any changes.